Using the import demand of the U.S. and export supply of China, explain how the imposed tariff led to “a sharp decline in bilateral trade, higher prices for consumers” and lower prices of exports by Chinese firms.

Using the import demand of the U.S. and export supply of China, explain how the imposed tariff led to “a sharp decline in bilateral trade, higher prices for consumers” and lower prices of exports by Chinese firms.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Protective Tariffs

A tariff is a kind of tax that is charged on exported and imported items. It means tariff is charged on both kinds of goods i.e., exported and imported. However, some goods may be exempted from this kind of tariff. Protective Tariffs refer to the charges which a country charged on imported goods to protect its domestic market. It also protects countries Industrialists in their Production. So, that their markets remain intact and do not get dumped by outside supply.

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